Lenovo Essay

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Lenovo, originally known as Legend Group, is one of the largest personal computer  (PC) manufacturers in the world. It employs more than 25,000 people and has more than  66 overseas branches,  operating  in more than  166 countries  across six continents.  Lenovo is the best-known  brand in China and Asia, with $164 billion annual turnover in 2007.

Legend was originally established  in 1984 by 11 Chinese computer  scientists with initial capital outlay of RMB 200,000 (US$25,000), headed by Lenovo’s founding chairman  Liu Chuanzhi.  In 2003 the company changed its official business name from Legend to Lenovo. As the most respected Chinese technology company, Lenovo offers a range of product categories, including personal computers,  networking products, software and peripherals, mobile handsets, and other digital products.  Its award-winning  Think products (Thinkpad  notebooks,  Think-Certer  desktops,  etc.) have been ranked  as premium-brand leaders in the global PC industry. As the leading technology company in China’s information  technology  (IT) industry, Lenovo commands  more  than  one-third of the PC market  in China, 7.6 percent  of market  share in the world. According to Gartner’s marketing  report, Lenovo is ranked  the fourth  PC seller in the world compared  to HP, Dell, and Acer, with market  shares of 18.3 percent, 14.9 percent, and 9.5 percent, respectively, in 2007.

Lenovo’s development  can  be divided into  three significant stages: initial development (1984–93), domestic growth (1994–2003), and going international (2004–). In the early 1980s, China experienced significant changes both politically and economically.

Information systems and technology development became  the fastest growth  areas in China. With  11 employees, Lenovo began selling foreign computers to Chinese customers. Its initial entrance into the PC market was as a sales agent of IBM. Slowly, the company began to grow by developing and commercializing its own IT products.  In 1988 Lenovo launched its own brand of personal computer  and established its Hong Kong branch. After nearly 10 years of initial development, Lenovo completed its role change from a sales agent to a computer  manufacturer.

Between 1994 and 2003, Lenovo entered  its rapid domestic  development   era.  The  company  realized that the Chinese PC market was not yet captured  by major international players, such as IBM, Compaq, or even Acer. Very quickly, Lenovo decided to develop and retail PCs at a low cost to Chinese  customers. This strategy made Lenovo a huge success. In 1996

Lenovo  became  the  market  share  leader  in  China for the first time and commanded  27 percent  share of the PC market in China by 2003. In 1994 Lenovo was listed  on  the  Hong  Kong stock  exchange  and became a constituent stock of the Hang Seng Index in 2000. After 20 years of development, Lenovo successfully became a leading brand  in the IT industry and an important player in China and Asia. In 1999 the company was ranked in the Chinese national top 100 electronic enterprises and became the top PC vendor in the Asia-Pacific region. In 2000 it was ranked in the top 10 of the world’s best-managed PC vendors.

After holding  the  leader  position  in Chinese  and Asian markets,  Lenovo aims to  expand  its business internationally  to succeed in the long term. Acquiring IBM’s Personal Computing  Division was a milestone in the history of Lenovo’s international expansion that made it China’s “go global” star. On December 8, 2004, Lenovo announced  acquisition  of IBM’s PC business with US$650 million in cash and US$600 million common stock. This strategic alliance gave Lenovo’s customers preferred access to IBM’s world-class customer services and enabled Lenovo to take advantage of IBM’s powerful  worldwide  distribution  and  sales network. The business transaction with IBM made Lenovo the world’s third-largest  PC business with approximately US$12 billion annual revenue for 2003.

The success of the company  is also highly correlated with its emphasis  on technology  innovations.

Lenovo is the  first  Chinese  company  to  introduce PCs to households  in China and first developed the Legend Chinese Character  Card that  could be used to translate  English operating  software into Chinese characters.  This pioneering  innovation  has affected the lives of millions of Chinese and received the highest National  Science-Technology  Progress Award in China. Additionally, Lenovo’s three research centers—China, Japan, and the United States—have produced many world-class advanced PC products.  The company now holds more than 2,000 patents and has won hundreds  of technology and design awards. Its extraordinary   research  and  development  capability has distinguished Lenovo from its competitors.


  1. Jerry Biediger et al., “Strategic Action at Lenovo,”  Organizational  Dynamics  (v.34/1,  2005);
  2. IBM Press Room, “Lenovo to Acquire IBM Personal Computing Division,” www.ibm.com (cited March 2009);
  3. Lenovo Company History,  lenovo.com.cn  (cited  March  2009);
  4. Gua Hua Sun, “Lenovo’s Annual Profit Double Increased,” Hexun News (May 23, 2008);
  5. Wie Xie and Steven White, “Sequential Learning in a Chinese Spin-Off: The Case of Lenovo Group Limited,”  R and  D Management  (v.34/4, 2004).

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